ADBE / AAPL takeover? - Options Trades

The same old rumor about AAPL taking over ADBE popped up again today. Out of sheer boredom I looked for some unusual order flow... And what do you know, I found some.

The day's largest trades from 1/7/2010 for ADBE are presented in the article. Simply put, someone sold a risk reversal 6500x and received $0.03. i.e Sold July 32 puts @ 1.43 and used that to fund a purchases of Jul 42 calls for 1.40. This is obvioulsy very bullish (unless it traded with stock).

I took a look at the Options Tab for several months to see if 6500 open interest (OI) is common. Lo and behold - it isn't. In fact, there is not a single line with OI greater than 2,574 in Feb, Apr, July, Jan 11, Jan 12 (other than the strikes in question).

Just for fun - how does this trade look if ADBE is taken over for $50?
Gain = 6500*100*{$1.43 + ($8.00 - $1.40)}
= $5,219,500

i have been in a couple software merger deals, i.e. orcl/beas orcl/psft and orcl/sebl and the order flow didnt signal that kind of action. mostly otm combos across the expiry range, which is the way i played as well.

i have been in a couple software merger deals, i.e. orcl/beas orcl/psft and orcl/sebl and the order flow didnt signal that kind of action. mostly otm combos across the expiry range, which is the way i played as well.